The Finance Minister, Mr Pranab Mukherjee, today clarified that the proposed amendments to the Income-Tax Act, 1962 will not mean re-opening all cases going back to 1961-62.

However, it would be applicable to cases where foreign assets were created by some company or individual without the sanction of the appropriate authority.

Defending the Government's proposal to amend the tax regime after the Supreme Court's order in the Vodafone case, Mr Mukherjee said that cases beyond six years could not be reopened.

“A retrospective amendment to the tax regime does not mean it gives you the opportunity to reopen the cases from 1961 or 1962. No income-tax case beyond six years can be reopened. Some amendments have been made in respect of certain cases beyond six years but that is only for the foreign assets created by some company or individual without the sanction of the appropriate authority,” Mr Mukherjee said at an interactive session organised by the Calcutta Chamber of Commerce here on Saturday.

Mr Mukherjee, however, reiterated that a retrospective amendment to the Income-Tax Act was essential for cross-border deals involving local assets.

Amendment to the tax regime would help avoid creating a situation wherein multinational companies can evade taxes payable to a country of source and country of operation, and also ensure that there is no double taxation.

The Supreme Court had in January said that Vodafone was not liable to be taxed on its $11.2-billion acquisition of Hutchison's Indian telecom assets.

Mr Mukherjee admitted that he refrained from any “dramatic announcement” in the Budget proposals for 2012-13 because of political constraints.

“I did not want, rather I did not attempt, to make any dramatic announcements (in the Budget proposals), because I have to keep in mind that every budgetary proposal requires the approval of Parliament,” he said.

>shobha@thehindu.co.in

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